SOUTHERN Area Focus Group Chief Operating Officer David E. Williams Chief Operating Officer

Agenda Opening Remarks Service Performance Peak Season Recap Southern Area Focus Group Agenda Opening Remarks Service Performance Peak Season Recap MTE Update Questions & Answers

Thank You for Your Participation In This valuable process Southern Area Focus Group Thank You for Your Participation In This valuable process Value of the Area Mailer Industry Focus Groups: Forum to Communicate Operational Changes Provides a Forum for Crucial Feedback / Suggestions / Ideas Builds Critical Relationships at All Levels of the Organization Immediate Issue Resolution

Service Performance Update Southern Area Focus Group Service Performance Update

First-Class Composite (Letters/Flats) YTD 93.20 Q2TD Actual SPLY Var 91.29 +1.13 +1.00 96.00 FCM Composite UCL/LCL Target SPLY Q2TD and NPA/YTD through January 13, 2017, Presort through January 6, 2017 Letters/Flats & NPA excludes some 5-digit Zips

Marketing Mail / Periodicals Composite Trend YTD & Q1TD Actual SPLY Var 89.69 +3.31 91.00 Standard UCL/LCL Target SPLY Q1TD and YTD through December 31, 2016 SPLY uses LPO methodology

Marketing Mail 89.36 89.83 +4.35 +3.16 YTD Q2TD Actual SPLY Var 91.00 Standard UCL/LCL Target SPLY Q2TD and YTD through January 13, 2017

Marketing Mail DSCF Letters YTD Q2TD Actual SPLY Var 93.96 94.84 +1.31 +1.30 91.00 DSCF Letters UCL/LCL Target SPLY Q2TD and YTD through January 13, 2017

Marketing Mail DSCF Flats YTD Q2TD Actual SPLY Var 87.13 87.98 +9.41 +6.80 91.00 DSCF Flats UCL/LCL Target SPLY Q2TD and YTD through January 13, 2017

Marketing Mail DNDC Letters YTD Q2TD Actual SPLY Var 93.80 94.35 +2.04 +2.07 91.00 DNDC Letters UCL/LCL Target SPLY Q2TD and YTD through January 13, 2017

Marketing Mail DNDC Flats YTD Q2TD Actual SPLY Var 88.27 89.33 +4.56 +2.56 91.00 DNDC Flats UCL/LCL Target SPLY Q2TD and YTD through January 13, 2017

Periodicals 81.80 81.53 +7.32 +6.18 YTD Q2TD Actual SPLY Var 91.00 UCL/LCL Target SPLY Q2TD and YTD through January 13, 2017

Continuous Improvement Focus Service Performance Summary Continuous Improvement Focus Mitigate Air Capacity Constraints Align and Optimize Surface Transportation Reduce WIP Cycle Times Focus on Last Mile Opportunities Intense Focus on Vital Few Opportunities Ensure Employee & Industry Engagement

Southern Area Focus Group PEAK SEASON RECAP

PEAK Season Recap Double digit growth in package volumes 809M Packages, represents a 15% increase over SPLY Monday, December 19, 2016 delivered 34.05M packages; highest day ever 2.441B pieces cancelled, represents a 2.22% decrease from SPLY Monday, December 19, 2016 – peak cancellation day with 174,800,348 pieces Networks remained fluid throughout peak

Southern Area Focus Group MTE UPDATE

USPS Has Spent $30M YTD on MTE New Buys MTE Inventory USPS Has Spent $30M YTD on MTE New Buys Plastic Trays and Sleeves, Pallets, Plastic Flat Tubs and Sacks MTE Inventory Available today 13.4 Million EMM Trays & Sleeves 10.6 Million MM Trays & Sleeves 7.6 Million Half-Trays & Sleeves 1.2 Million Pallets 4.3 Million Flat Tubs 3.2 Million Sacks 2 Million Sacks on order

USPS – Industry Collaboration Partnership USPS – Industry Collaboration Exchange Ideas & Preempt Issues Area Mailing Industry Focus Groups MTAC PCC Meetings NPF Drive Innovation and Adopt Technology Committed to Collaboration/Communication Opportunities: Area Mailing Industry Focus Groups – Calendar by Area http://postalpro.usps.com/industry-forum/area-mailing-industry-focus-group/calendar NPF 2017 – Baltimore, MD May 21-24 http://www.npf.org Growing Together http://postalpro.usps.com/mtac MTAC – Quarterly Meeting Dates

Summary Our Commitment Southern Area Focus Group Service Excellence Proactive Communications Transparency

Southern Area Focus Group Thank You Questions? 20